Stellus Capital Management has entered into an agreement to be acquired by P10, Inc., enabling a strategic partnership aimed at enhancing direct lending opportunities in the lower-middle market while preserving Stellus' operational independence.

Target Information

Stellus Capital Management, a prominent U.S. direct lender with approximately $3.8 billion in assets under management (AUM), specializes in senior secured loans for the lower-middle market. The firm boasts a robust investment portfolio, having invested over $10.3 billion across more than 375 portfolio companies over its 20+ years of operation. Stellus maintains offices in Houston, TX, Charlotte, NC, and the Washington, D.C. area, enabling it to forge significant relationships and access diverse lending opportunities.

Under the terms of a definitive agreement, Stellus will be acquired by P10, Inc. (NYSE: PX), an established private markets solutions provider that also focuses on the lower-middle market. Importantly, Stellus will continue to operate under the guidance of its existing management team, maintaining its core investment processes, strategy, and operations.

Industry Overview

The direct lending industry within the United States, particularly in the lower-middle market, has experienced significant growth in recent years. This segment has become increasingly attractive to investors as traditional banks have scaled back t